Guardian Media profits collapse

Guardian Media Group saw profits collapse by 86 per cent last year as a result of the advertising downturn and continued heavy spending on its internet ventures.

GMG, which is run as a not-for-profit private trust, said advertising at its national titles,The Guardian and The Observer, had been savaged but the company managed to stay in the black because of greater resilience at its regional newspapers and car publications.

The group's turnover rose by 4 per cent to £456m but profits crashed from £67m to £9.8m, for the year ended 31 March.

Bob Phillis, the chief executive, pointed to an industry-wide fall in national advertising revenues of 30 per cent but declined to put an exact figure on the situation at the group's two titles. "National revenues were bleak. It was as severe as the rest of the industry in display advertising but less severe in classified recruitment, because of the high proportion of public sector ads we have," he said.

GMG did not break out financial figures for its national titles. Mr Phillis said The Guardian managed to remain profitable but The Observer made a loss – the Sunday newspaper has been in the red for years.

"Having a diverse portfolio allows us to generate profit and cashflows to sustain the nationals," Mr Phillis said.

At the regional titles, which include the Manchester Evening News, advertising sales rose 0.4 per cent as overall regional revenues grew 5 per cent. Mr Phillis said advertising should be in positive territory for the national titles in the first quarter of next year.